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The Exchange Rate and US Tourism Balance of Trade

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  • Cheng, Ka Ming
  • Kim, Hyeongwoo
  • Thompson, Henry

Abstract

This paper investigates evidence on the effect of dollar depreciation on the US tourism balance of trade. Export revenue and import spending functions are estimated separately with structural vector autoregressive methods to better capture the dynamic adjustment to exchange rate shocks. Quarterly data cover the period of floating exchange rates from 1973 through 2007. Depreciation raises long term US export revenue but there is no effect on import spending.

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File URL: http://mpra.ub.uni-muenchen.de/18318/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18318.

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Date of creation: Oct 2009
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Handle: RePEc:pra:mprapa:18318

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Keywords: balance of trade; exchange rate; tourism; structural vector autoregressive model; J-curve;

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References

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  9. Boyd, Derick & Caporale, Gugielmo Maria & Smith, Ron, 2001. "Real Exchange Rate Effects on the Balance of Trade: Cointegration and the Marshall-Lerner Condition," International Journal of Finance & Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 6(3), pages 187-200, July.
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  17. Mohsen Bahmani-Oskooee & Taggert Brooks, 1999. "Bilateral J-Curve between U.S. and her trading partners," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 135(1), pages 156-165, March.
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  20. Senhadji, Abdelhak S., 1998. "Dynamics of the trade balance and the terms of trade in LDCs: The S-curve," Journal of International Economics, Elsevier, Elsevier, vol. 46(1), pages 105-131, October.
  21. Abdelhak Senhadji, 1998. "Time-Series Estimation of Structural Import Demand Equations: A Cross-Country Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 45(2), pages 236-268, June.
  22. Michael Vogt, 2008. "Determinants of the demand for US exports and imports of tourism," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 40(6), pages 667-672.
  23. Goldstein, Morris & Khan, Mohsin S., 1985. "Income and price effects in foreign trade," Handbook of International Economics, Elsevier, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 20, pages 1041-1105 Elsevier.
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